Small cap movers: Instem proves what the doctor ordered in surprisingly busy week for corporate news

By Jon Hopkins / March 30, 2018 / www.proactiveinvestors.co.uk / Article Link

It might have been a fore-shortened trading week ahead of the Easter break but there was still an egg-load of corporate news released as the first-quarter came to a close, with some even provoking good gains.

Among the highlights, Instem Plc (LON:INS), a technology provider to the drugs industry, shot 25% higher to 233p after it announced a significant contract extension from a company using its SEND platform.

The group said the client - described as a top-five pre-clinical contract research organisation - has increased the size of the deal by US$400,000 to US$500,000.

SEND stands for Standard for the Exchange of Nonclinical Data and Instem's innovative system allows a more efficient review of information, "offering improved data quality, accessibility and predictability".

Instem said it had extended "several orders" with existing clients and has a healthy prospect pipeline.

There was also a boost for shares in FreeAgent Holdings PLC (LON:FREE) which rocketed 83% higher to 118p after Royal Bank of Scotland Group PLC (LON:RBS) agreed to acquire the cloud-based accounting software and mobile applications provider.

The FTSE 100 constituent is to buy the AIM-listed group for 120p per share in cash, valuing the company at ?53mln, and representing a 43% premium to its November 2016 flotation price of 84p.

DX Group shares deliver

Elsewhere, DX Group PLC (LON:DX) shares shot 11.5% higher to 8.26p on Thursday after the under-pressure mail delivery firm announced plans to raise ?4mln to support its ongoing turnaround plan.

Posting first-half results showing losses narrowing, the group said it proposes a placing of ordinary shares at a price of 7.41p each and also intends to redeem convertible loan notes for shares at the same issues price, adding that its shareholder Gatemore Capital Management has indicated support for the moves.

Ron Series, DX's chairman also said: "Trading conditions remain challenging, but we are already seeing encouraging signs that our turnaround plans are gaining traction and expect this to build through the year and into 2019."

There were two big bits of news from small cap oil minnows this week - one offshore and one onshore.

Lansdowne Oil & Gas PLC (LON:LOGP) saw its shares leap 45% higher to 1.9p on news it has finally signed a farm-out agreement for a project in the Irish Sea with a Chinese group.

A consortium, led by Apec Energy, has agreed to take a 50% interest in the Barryroe project in return for paying the cost of three wells and associated side-tracks.

Lansdowne owns 20% of Barryroe while the project operator Providence Resources PLC (LON:PVR) holds 80%.

In somewhat predictable fashion, Providence Resources shares also jumped 18% higher to 10.25p.

The Irish oil explorer has been looking for a partner at Barryroe for at least five years.

Production boost for Angus Energy

Meanwhile, shares in UK onshore oil and gas developer Angus Energy Plc (LON:ANGS) jumped 22.5% higher to 7.5p on Thursday after it said it has resumed production at its Lidsey and Brockham oil fields.

Angus said flow rates from the Lidsey oil field are currently 191 barrels of oil per day (bopd), a three-fold increase over its initial flow rates as reported on 17 November 2017 for both Lidsey wells.

The group added that Brockham oil field has resumed production at 21 bopd and expects this flow rate to increase to roughly 35 bopd within approximately 7 days.

Overall, however, the FTSE AIM All-Share index had another pretty forgettable week, slipping about 0.6% lower to 1,013, while the FTSE 100 index managed to rally nearly 2% higher to 7,070 - though over the first quarter of 2017 as a while the blue chip index lost around 8%.

Fund-raising moves created some of the biggest fallers among the small caps this week, with pallet manufacturer RM2 International SA (LON:RN2) the worst off, dropping over 45% to 1.75p after it announced plans to raise US$36ln in an equity placing and a further ?,?5.0mln via a deeply-discounted open offer.

The firm said the placing proceeds will be used to fund the retro-fitting of existing inventory of its RM2 Blockpals pallets with track and trace devices.

RM2 intends to implement the share placing in two tranches, initially with an issue of 2.54bn new ordinary shares to existing institutional investors, certain directors and senior management team at just 1p per share.

Gfinity raises cash

Also seeking cash this week, esports group Gfinity Plc (LON:GFIN)  saw its shares shed nearly 20% at 12.13p after it raised ?6.7mln via a placing and subscription of 55.8mln new ordinary shares at a price of 12p each.

The funds will be used to expand its Gfinity Elite esports series and came as the group delivered first-half results showing a doubling in revenue.

In other news this week, Gfinity also announced that it has signed leading fragrance and personal care brand, Lynx as an official partner for the Elite Series UK for season three.

And Metminco Limited (LON:MNC) shares plunged 74% in value to 0.6p after the miner said it is now seeking to raise A$5.7mln through a revised rights issue as it shifts its strategy and named a new executive chairman.

The group said its new strategy would include the start of a drilling programme on the Tesorito prospect and access to the Chuscal prospect, both of which are considered highly prospective gold exploration targets.

Metminco named Kevin Wilson as its new executive chairman, while it said William Howe had resigned from the board to take up the role of chief operating officer based in Colombia.

Billing Services blighted

Away from fundraising moves, Billing Services Group Limited (LON:BILL) saw its shares drop 19.6% to 2.00p after the payment processing firm posted disappointing full-year results.

The firm saw its underlying earnings (EBITDA) drop to US$0.9mln, down from US$5.7mln the year before, as it took US$15.3mln in impairment charges against goodwill.

The company also paid out US$2.1mln in 2017 to the Federal Trade Commission as part of a 2016 settlement of US$5.2mln regarding customer redress from a previous business.

And Quadrise Fuels International PLC (LON:QFI) saw its shares crash 45% lower to 4.87p as it revealed that one of the trial projects for its synthetic, enhanced heavy oil, called MSAR, may not proceed.

Last week the company said it had been informed that the signing of a fuel supply agreement between a Saudi Arabian oil company and a refinery partner for its MSAR 'Production to Combustion' trial manufacturing facility had been delayed and that obtaining the required signatures before the 1 April 2018 deadline was unlikely.

This week, as it reported half-year numbers, Quadrise revealed that the MSAR trial may not now proceed as planned due to its reliance on the fast-track solution offered by the firm and the refinery group.

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